Small Firms Talk About Adapting to Survive

One big advantage of being small: It’s easier to turn on a dime.

By Jonathan N. Crawford, Researcher-Reporter, the Kiplinger letters

February 5, 2009

These are the times that try a business’s ingenuity. It’s tough to survive, let alone thrive. But some companies are rising to the challenge. There may be a lesson for your firm in their stories.

The key to surviving an economic downturn is flexibility. Small business owners don’t have all the resources that a giant company would have, “… but we have this nimbleness,” says Bill Bartmann, small business adviser and CEO of online business resource BillionaireU.com. “That nimbleness in tough times is absolutely crucial to survival.”

Shift markets. Panomatics USA initially created virtual property tours for Realtors’ Web sites. Now, hard hit by the housing collapse, the California franchisee showcases the facilities and ambience of salons, spas, hotels and restaurants, capitalizing on their online marketing efforts, and has more business than ever.

“I don’t want to make other people envious, but we are actually very happy in how things are going,” says co-owner Taya Pocock. “You just have to adapt to the current market climate to see where the potential lies,” she says.

Switch products. N.Y.’s Santi Express, a residential moving outfit, was also suffering. The firm shifted its focus to warehousing, storing furniture and items from downsized businesses and foreclosed homes. It’s now expanding.

“You just must be creative, must not fold; you have to be strong in this economy,” says the company’s founder and president, Sheryl Santi Luks.

Rockledge Design Studios worked with fabricated metal to create sculptures and build expensive contemporary furniture for high-end galleries. But since being hit hard by the economic downturn in 2002, the Cocoa, Fla.-based firm has parlayed its expertise in complex metalwork to find business outside the art and furniture world.

It now builds signage, lighting fixtures, handrails and electrical hardware for architects, commercial developers and as a subcontractor for the Department of Defense. Last year, Rockledge Design Studios reported its best year yet, and it has spun off a new division that works exclusively on metal fabrication.

“We saw the light that we weren’t going to survive going in the direction that we were going. Luckily we were smart enough to adapt, but to adapt to an area that we knew would work for us,” says owner Patrick Pacifico.

Of course, larger firms can benefit from trying new things, too. When Michigan-based Spartan Chassis, a medium-size company, concluded that there wasn’t enough demand for recreational vehicles and emergency vehicles -- its primary markets -- to sustain growth, it reoriented itself to supply parts for specialty military vehicles used in Iraq. Thanks to military subcontracts, the firm’s third quarter 2008 earnings were up 60% from the same period a year earlier.

Thinking outside the box can keep a company inside profitability. “Most small business people are so busy working in their business that they don’t get the opportunity or the luxury to work on their business. Sometimes detaching yourself and standing back and contemplating it might be what you should really do,” says Bartmann.

For weekly updates on topics to improve your business decisionmaking, click here.